The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the Senate Committee on Judiciary, and the Senate Committee on Ways and Means on Feb. 27, 2023.
March 1, 2023
Conference Room 211
To: Senate Committee on Judiciary
Senator Karl Rhoads, Chair
Senator Mike Gabbard, Vice Chair
Senate Committee on Ways and Means
Senator Donovan M. Dela Cruz, Chair
Senator Gilbert S.C. Keith-Agaran, Vice Chair
From: Grassroot Institute of Hawaii
Ted Kefalas, Director of Strategic Campaigns
RE: SB507 — RELATING TO WETLAND PRESERVATION
Dear Chair and Committee Members:
The Grassroot Institute of Hawaii would like to offer its comments on SB507, which would require the Hawaii Housing Finance and Development Corp. to ensure that any of its housing projects that are otherwise exempt from statutes, ordinances and rules governing planning, zoning and construction standards would not impact wetlands or natural stormwater infrastructure.
The bill further requires an environmental assessment under the environmental impact statements law for any development that would impact wetlands or natural stormwater infrastructure.
This bill exemplifies how good intentions have contributed to the lack of affordable housing in Hawaii. This is because good intentions that result in additional regulations, permits and approvals are the most significant barrier to housing growth.
Recently, the Economic Research Organization at the University of Hawai‘i studied Hawaii’s housing regulations using the Wharton Land Use Regulatory Index as a way to measure the impact of government regulation on housing in Hawaii relative to other states and municipalities. Its report found that Hawaii had the worst score in the nation, with three Hawaii counties among the 10 U.S. counties with the most restrictive regulations.
Unsurprisingly, a high Wharton Index score indicating heavy regulation was associated with significant delays for construction and permitting. The average length of approval delays in Hawaii was three times the national mean.
The study also found a strong correlation between regulation and home prices, leading the researchers to suggest that cutting regulation would help make housing more affordable in Hawaii.
No one disputes the importance of protecting the environment. However, this bill would handcuff the HHFDC and frustrate efforts to build affordable homes. It is difficult to imagine any homebuilding development that would not arguably affect natural stormwater infrastructure or wetlands in some way, thereby making this bill’s requirements a significant barrier to new construction.
We suggest that the bill be altered so as to give HHFDC greater flexibility to proceed with homebuilding projects absent evidence that the project will have a significant adverse effect on wetlands or natural stormwater infrastructure.
Such a compromise would address concerns about environmental protection without frustrating efforts to build affordable housing.
Thank you for the opportunity to submit our comments.
Director of Strategic Campaigns
Grassroot Institute of Hawaii
 Rachel Inafuku, Justin Tyndall, and Carl Bonham, “Measuring the Burden of Housing Regulation in Hawaii,” The Economic Research Organization at the University of Hawai‘i, April 14, 2022, pp. 2-4.
 Ibid, p. 7.
 Ibid, pp. 7-8.